The Federal budget 2023-24 – what it means for property
With the Federal Budget 2023-24 aiming to help Australians with the cost-of-living and easing pressure on low-income earners, here are some of the announcements affecting property investors, renters, and social housing.
Increase in rent assistance
The Commonwealth Rent Assistance’s (CRA) rates increase of 15% will benefit around 1.1 million households.
Support for build-to-rent projects
To encourage build-to-rent projects, the government has announced tax breaks to include the increase of depreciation rate from 2.5% to 4% per year for projects commenced after 9 May 2023.
The Government will also cut the withholding tax rate for eligible fund payments from managed investment trusts (MIT) attributable to residential build-to-rent projects from 30% to 15%. This change will be effective starting 1 July 2024 for income attributable to newly built build-to-rent projects.
More social and affordable rental homes
With the aim of improving the supply of rental properties, the federal government has committed to support more social and affordable housing.
This includes releasing an additional $2bn in funding for the social rental housing segment and increasing National Housing Finance and Investment Corporation’s (NHFIC) liability cap from $5.5 billion to $7.5 billion from 1 July 2023.
This will enable NHFIC to provide lower cost and longer-term finance to community housing providers.
One million homes from 2024
The Government also says, through the National Housing Accord, it will be working with state and territories, the Australian Local Government Association, investors and the construction sector to boost supply and build one million new homes from 2024.
Household Energy Upgrades Fund
The Government is investing in energy improvements for households. The $1.3 billion Household Energy Upgrades Fund will create low‑interest loans and fund upgrades to social housing to improve energy performance.
The Fund will inject $1 billion into the Clean Energy Finance Corporation to unlock more than 110,000 low‑interest loans for energy‑saving home upgrades, in partnership with private lenders.
The Fund will also provide $300 million to partner with states and territories to make energy performance upgrades to social housing.
This energy investment in social housing is expected to cut the energy needed by 60,000 social housing properties by one‑third and give tenants savings on their energy bills.
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